OPEC Forecasts Weakest Demand Since ’03 Amid Warning of $
Saudi Arabia’s oil minister gave no sign the world’s largest exporter will cut output on a day when OPEC said demand for its crude is heading for the lowest since 2003 and global prices fell below $65 a barrel for the first time in five years.
“Why should I cut production?” Ali Al-Naimi said in response to reporters’ questions today in Lima, where he’s attending United Nations climate talks. “This is a market and I’m selling in a market. Why should I cut?”
The Organization of Petroleum Exporting Countries earlier cut the forecast for how much crude it will need to produce in 2015 by about 300,000 barrels a day to 28.9 million a day, the least 12 years. The group’s three largest members, Saudi Arabia, Iraq and Kuwait, are offering oil to Asian buyers at the deepest discounts in at least six years. Prices may remain at current levels for the next six months, a Kuwaiti official said.
Brent crude, the international benchmark, plunged as much as 4.9 percent to $63.56 a barrel on the ICE Futures Europe Exchange in London. That’s the lowest since July 2009. An Iranian official warned yesterday prices could drop to $40 a barrel should OPEC’s unity break down.
Brent crude slumped into a bear market this year amid speculation that Saudi Arabia and other nations in OPEC won’t cut output in response to tumbling prices. Prices plunged 18 percent since the group met on Nov. 27 and agreed to maintain a 30 million-barrel-a-day production target. OPEC said in a monthly report today that demand for its crude is weakening amid expanding supplies from U.S. shale producers.
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http://www.bloomberg.com/news/2014-12-10/opec-says-2015-demand-for-its-crude-will-be-weakest-in-12-years.html
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